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Questions on supply chain management
Aspects of supply chain management
Questions on supply chain management
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Introduction Accommodating customer requirements in most supply chain arrangement requires a forecast to drive the process. (book page 133) When looking into the definition of forecasting which is projecting what is going to be sold (units, seats, rooms etc) it is also important to take into consideration where and when in order to reach the future goals. (book page 133) Since it is argued that effective supply chain and logistical capacity is an important competitive advantage. (Christopher 2005) Where maximizing the revenue is the key element in hospitality sector and for hotel industry there is an increased attention on effective demand management and forecasting for reservation systems. (http://www.sciencedirect.com/science/article/pii/S0169207002000110) …show more content…
£ - Premier Inn revenue 1.822 mil. £). Managing the rising demand is the main challenge if they want to maintain their leading position and rising popularity in the market. In annual report it has been stated that insufficient reservation system and failure, caused business interruption, process failure and financial loss and taken given place in Principal Risks and Uncertainties section in annual report. ( annual report andreas risks) This essay will mainly focus on the importance of demand forecast and management in Hotels Industry by using Premier Inn Data and concentrate on the possible improvements can be achieved through Advance Booking Methods in Forecasting Hotel Reservations.
Methodology This study will make inferences by content analysis in line with “Analyzing the Use of an Advance Booking Curve in Forecasting Hotel Reservations” “Hotel reservation methods--a discriminant analysis of practices in English Hotels” “A comparison of forecasting methods for hotel revenue Management”. As well company information from annual reports (2014 and 2015) will be analyzed with regard to occurred reservation system failures to conclude recommendation for how capacity utilization and demand management can be enhanced by updating current reservation system with better forecasting capabilities.
SWOT Analysis Premier Inn
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Because, internet today is enabling web-based suppliers an opportunity to meet a choice of different types of customers (Schoenbachler&Gordon, 2002) and has evolved as a feasible distribution channel for the firms that wish to expand their market penetration (Frazier, 1999; Frazier & Antia, 1995), reduce costs (Payne & Frow, 2004), increase revenues ( Kotler, 2000), spread risks, and strengthen customer loyalty (Kelly, 2002) through its use (Hobmeier, 2001).now most of the hotels are using the multiple channel strategy where they are in partnership more than one sales and distribution channel to serve the same target market and this has grown in the recent years. This is creating higher complexity for the hotel management as the data are coming from different partners. As customers, today are using multiple channels, it is almost certain that the future will remain to contain a mixture of even more complex channels (Balasubramanian , Raghunathan, & Mahajan, 2005). Since now, it is obvious that why hoteliers employing multiple channels including electronic ones, is no different; to maximise customer awareness and market share and reduce costs, this increasingly widespread trend to cooperate with new channels rather than stick to
Target Corporation needs to increase product availability based on the customer needs using a forecasting and supply chain
Apart from booking time, the stars of hotel also affect the booking decision of the customer for example a four to five star hotel will have higher price for the booking while 3 or 2 stars have lower booking price. Thus consumer knows the price, brand, its location etc. The customer can also have information any fluctuation in its prices therefore the customer rational about his booking; as the customer has full information about the market price, he can assess the available information and can make good decision regarding the online hotel booking. Her in the analytical formwork we will only discuss the customer behavior for price change. Initially the equilibrium of rational expectation was based on strong assumption in econometric model. However due the advancement in mathematics in late fifties and early sixties “General Equilibrium” model, it has been developed mathematically by Rander (1968, 1972), however he imposed so many restrictions. The analytical framework is based on Rander (1968, 1972) and it is the transformed form as it is applied
The first situation is that of “special events” such as holiday periods, sporting/political events, etc. These events throw more power in the relationship to industry players due to the large customer demand and constrained supply. For example hotels see huge demand around the World Cup sporting event and hotel prices as a result on average spike between 100-300% compared to normal levels and for the last World Cup prices in one city went even further north of around 583% (Mallén, 2013). On the flip side, periods of economic recession have the opposite affect by impacting demand negatively thus forcing hotels to greatly lower prices to spur demand or compete with other industry players. During the last US recession, the average hotel occupancy rate dropped to a record low of 45% at one point from the normal average of 63%. As a result of the greatly declining revenues, such as a 48% drop by Marriott International, industry players laid off over 400,000 employees and greatly scaled back costs and new developments. Also importantly to customers who now saw more power in the relationship drift to their side during this time period, the average daily room price dropped to $98.18 (2009) from the record high of $107.42 pre-recession (2008). Both effects on opposing fulcrums show how important customer demand can affect the industry and the players’ actions
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
Dinner Bell Hotel is a Michigan resort, with large meals, farm animals, petting zoo, lake for swimming and much more. As suggested by the name, the hotel holds the tradition of ringing the bell to announce mealtime. July through early November is the busiest time for the hotel as all summer and fall guest enjoy the atmosphere of an old-fashioned resort with a comfortable environment. The weather gets too cold by early November for most outdoor activities thus in order to attract customers, the hotel has also built an indoor pool and developed long theme weekends like classic movies.
If one were to ponder the question of whether hotels should overbook their rooms the answer may appear to be quite simple. Why would a hotel owner want to book more reservations for rooms than they actually had available? This is an issue that has faced the hotel industry for a number of years. Contrary to what the average person may think about hotels overbooking their rooms, it has actually shown itself to be a noble strategy in achieving maximum profitability when done accurately. It is imperative that it is done in an appropriate manner so as to not give the hotel a corrupt name or lead to guest dissatisfaction.
However, despite being so important, hotel websites are still not leveraged to draw maximum direct bookings. Majority of the hotels are largely and mainly dependent of third party booking agents to get reservations at their properties which is a costly affair. So, in this context, it is quite obvious to say that a hotel should adopt a smart web booking engine to turn its website into a potential source to generate enhanced booking which ultimately leads to profit maximization.
In this firm their demand planning provides forecast visibility throughout their entire global supply chain. Enhanced visibility provides insight into supply and demand fluctuations, and this visibility allows the firm to make rapid, fact-based decisions. As for an example, in case the demand from the customer is in a large volume and within a short period of time frame, this firm tend to have discussion with the customer or else will outsource the required inventory to make the orders of customers. Normally the items being outsourced will be oil, sugar and wheat flour as these items are controlled
The hotel industry is a competitive market where hotel management’s goal is to decrease the vacancy rate and to increase the customer return rate. On the other hand, hotel guests have certain expectations for hotel service, albeit they are often disappointed with one or more of many hotels properties that stretch from value and service to amenities [Heung, 2000, p.308]. In the age of the Internet, both
Building a relationship with the customer has evolved into a system in itself be coordinated through them and cooperation between multiple destinations within the organization in order to one strategic objective, namely, to keep the property profitable customers and ensure their loyalty to the maximum possible period. Therefore, the main task of the CRM also be outside the scope of the marketing department and production, warehouse management and to senior management. But the new thing is in conjunction with the development of information and communication technologies, the emergence of what became known as the management of relations with customers electronically
Having a well-oiled reservation system is also important to not to lose a customer through your reservation center. As most times a guest will call instead of utilizing any website. Retain these loyal, direct-booked customers by making a tailored and highly customized experience is big factor for proper booking success. Looking at the historical data, projecting the ADR and managing the occupancy to eliminate OTA availability during anticipated sell-out dates. Having a strategy to profitable occupancy and not just to sell out the hotel at all costs. Finally, today no marketing campaign is complete without establishing the traffic to direct website and having a strong presence on the Social Media.
To increase the competitiveness in market, online travel agencies will sell different type of products (e.g. flights, accommodations, and cars) from different suppliers. It can provide all service to their customer and purchase the product online using a single site, so the online website provide the detail information and enough guideline to help the customer to purchase their product (O’Connor and Frew, 2002; Lee, Sung, DeFranco, & Arnold, 2004). Online travel agencies can cooperate with airline to offer the lower price flight ticket to customer. In addition, online travel agencies also cooperate with different vendor to offer the travel
Business forecasting can be used in a wide variety of contexts, and by a wide variety of businesses. For example, effective forecasting can determine sales based on attendance at a trade show, or the customer demand for products and services (Business and Economic Forecasting, p.1). One of the most important assumptions of business forecasters is that the past acts as an important guide for the future. It is important to note that forecasters must consider a number of new information, including rapidly changing economic conditions and globalization, when creating business forecasts based on past sales.
Effective and express ICT infrastructure and software applications in the tourism sector (Hotel Business) are decisive in tourism escalation. ICTs allow customer supervision connections and supply chain management to be mutual into a single resource that assists a range of operations such as: